PROJECTSUMMARY?PROJECT4 Differencesinclinicalpracticeareoftendrivenbyfactorsunrelatedtothehealthneedsofpatients,suchas reimbursementratesforprocedures.Withupto10-folddifferencesinpaymentratesforidenticalservices acrossthemainfundersofhealthcare-privateinsurers,Medicare,andMedicaid?thereisenormouspotential formisalignedincentivesandinefficiency.Thisincludesbothoveruseofineffectivebutwell-compensated treatments,orunderuseofpoorly-compensated,effectivetreatmentsandlimitedaccesstocare,particularly amongMedicareandMedicaidenrollees.InthisProject,weproposetotestseveralhypothesesregardingthe potentialharmofhighrelativecommercialprices(orlowMedicaidprices)usingthelargedatasetsfromCoreB including100%Medicareclaims,100%Medicaiddata,andcommercialinsurancefromOptumLabs,theBlue HealthIntelligence,andtheHealthCareCostInstitute(HCCI).Wefirstcreatenewregionalcomprehensive measuresofoverallhealthcareutilizationandspendingthatareadjustedfordifferencesacrossregionsinage, sex,poverty,andhealthstatus.Wethenaskwhetherhighcommercialreimbursementrates(relativeto MedicareorMedicaid)affectqualityofcarefortheelderlyandvulnerable?MedicareandMedicaidrecipients- withaparticularfocusonaccessforvulnerablepopulations.Wehypothesizethathighcommercialrateslead tolessMedicareandMedicaidutilization,andmoresortingtolower-qualityortosafetynetproviders. Continuingonthisthemethatpriceshiftsmayadverselyaffectutilizationandqualityofcare,wealsoconsider discontinuitiesinincentivesforemergencydepartment(ED)patients.WhenMedicarefundsemergencycare, hospitalslosemoneywhenpatientsaredischargedfromtheED,butmakemoneywhenEDpatientsare admittedtohospital;?thisdoesnotholdforprivate-paypatients.Wewilltestthehypothesisthatthesefinancial incentivesleadtounnecessaryhospitalizationsandadverseoutcomes,usingbothadiscontinuityapproach, andbyconsideringanexogenouschangeinEDmanagementpracticesforsome(butnotall)hospitals. Finally,weproposetostudyhowchangesinMedicarereimbursementratesinfluenceprivatepricesandhealth carequalityusinganaturalexperimentinwhichfederallegislativechangescausedapproximately100 hospitalstoreceiveanaverageof10%higherMedicarereimbursementrates,withnoimpactoncomparable hospitals.Insum,abetterunderstandingofhowthehealthcaredeliveryenvironmentaffectsphysician behaviorandqualityofcarecanprovidemakerswithguidanceonthehealthrisks(andnotjustthefinancial risks)ofeitherhighcommercialprices,orlowMedicareandMedicaidprices.